USMCA (fka NAFTA) – Trump and Trade https://www.trumpandtrade.com
Timely legal updates on the Trump administration's international trade activities and policiesMon, 14 Jan 2019 19:21:43 +0000en-UShourly1https://wordpress.org/?v=4.9.9https://trumpandtrade.lexblogplatformthree.com/wp-content/uploads/sites/783/2018/05/favicon.pngUSMCA (fka NAFTA) – Trump and Trade https://www.trumpandtrade.com
32322018 Year in Review – Overview of President Trump’s Major Trade Actionshttps://www.trumpandtrade.com/2019/01/2018-year-review-overview-president-trumps-major-trade-actions/
https://www.trumpandtrade.com/2019/01/2018-year-review-overview-president-trumps-major-trade-actions/#respondMon, 07 Jan 2019 18:11:35 +0000https://www.trumpandtrade.com/?p=2381Continue Reading]]>International trade and international trade disputes were a predominant focus of President Trump and his trade officials throughout 2018. Thompson Hine’s Trump and Trade team has prepared a slide presentation to provide our readers with a broad overview of the most significant trade actions taken by the Trump administration last year. From the renegotiation of the North America Free Trade Agreement (NAFTA), which is now the U.S.-Mexico-Canada Agreement (USMCA), to the many ongoing trade actions involving imports of steel, aluminum and products from China, it was a busy year. This overview concisely presents details and the current status of the president’s primary trade activities.

The presentation includes information on the current status of President Trump’s major trade actions, including NAFTA/USMCA negotiations, the U.S.-Korea Free Trade Agreement, and other bilateral trade negotiations with Japan, the European Union and the United Kingdom. It also provides details on major trade and tariff actions occurring in 2018, such as the Section 232 steel/aluminum tariffs, the Section 232 automobile and automobile parts investigation, and the Section 301 China-related tariffs.

We invite you to stay abreast of continuing developments in 2019 via our blog, TrumpandTrade.com. To receive an email notification whenever a new post is published, please subscribe to the blog.

Happy new year!

]]>https://www.trumpandtrade.com/2019/01/2018-year-review-overview-president-trumps-major-trade-actions/feed/0Trump Threatens to Withdraw from NAFTA in Effort to Spur Congressional Actionhttps://www.trumpandtrade.com/2018/12/trump-threatens-withdraw-nafta-effort-spur-congressional-action/
https://www.trumpandtrade.com/2018/12/trump-threatens-withdraw-nafta-effort-spur-congressional-action/#respondMon, 03 Dec 2018 21:17:26 +0000https://www.trumpandtrade.com/?p=2283Continue Reading]]>On December 1, 2018, President Donald Trump announced his intention to formally terminate the North American Free Trade Agreement (NAFTA) in 2019. Addressing the press aboard Air Force One, Trump stated that he will terminate the agreement within six months in an effort to get the U.S. Congress to move on implementing the United States-Mexico-Canada Agreement (USMCA): “And so Congress will have a choice of the USMCA or pre-NAFTA, which worked very well.” In accordance with NAFTA Article 2205, “A party may withdraw from this Agreement six months after it provides written notice of withdrawal to the other Parties.” While the president can announce his intention to withdraw from the agreement and even deliver written notice of termination, it remains open for debate if congressional approval is required for complete termination to take effect.

These comments set the stage for a showdown with congressional leaders on the passage of the USMCA and whether it can be done within the president’s desired timeline. Senator Ron Wyden, the ranking member of the Senate Finance Committee, issued a statement shortly after the USMCA was signed on November 30, 2019 indicating that he still has some concerns about the negotiated USMCA: “Over the coming months I will push to see that these concerns are addressed before Congress considers this proposal.” To implement the USMCA, a majority in each chamber of Congress is required to pass the law; as a result of the mid-term congressional elections in November, Trump will need bipartisan support to obtain that majority.

]]>https://www.trumpandtrade.com/2018/12/trump-threatens-withdraw-nafta-effort-spur-congressional-action/feed/0United States, Mexico and Canada Sign New Trade Agreementhttps://www.trumpandtrade.com/2018/11/united-states-mexico-canada-sign-new-trade-agreement/
https://www.trumpandtrade.com/2018/11/united-states-mexico-canada-sign-new-trade-agreement/#respondFri, 30 Nov 2018 17:57:45 +0000https://www.trumpandtrade.com/?p=2278Continue Reading]]>On the sidelines of the international G-20 (Group of Twenty) forum in Buenos Aires, Argentina, U.S. President Donald Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto signed today the new United States-Mexico-Canada Agreement (USMCA), launching the formal process to replace the North American Free Trade Agreement (NAFTA). During the signing ceremony, Trump stated, “This new agreement will ensure a future of prosperity and innovation for Mexico, Canada and the United States.”

Today’s ceremony is a significant milestone for Trump, who focused on the modernization of the NAFTA in his presidential campaign, and follows an intense period of negotiations completed in September 2018 (see Trump and Trade Update, October 2, 2018). The signing ceremony also occurred on Nieto’s final day in office and despite the parties’ continuing disagreement over the Section 232 tariffs the United States has placed on steel and aluminum imports from Canada and Mexico. In brief remarks, Trudeau raised the need to remove these tariffs, stating that “With hard work, good will and determination, I’m confident we will get there,” and adding that “Our shared interests, prosperity and security demand it.”

While the USMCA has now been signed, the trade agreement must still be ratified by Congress. Trump notified Congress on August 31, 2018 of his intent to sign the agreement, and this notification triggered certain procedures under the Trade Promotion Authority (TPA) (formally known as the Trade Preferences Extension Act of 2015). Now that the USMCA is signed, the Trump administration has 60 days under TPA to report to Congress changes to U.S. law that are required to comply with the terms of the agreement. Also, within 105 days of the agreement being signed, the U.S. International Trade Commission (ITC) must complete a study of the agreement’s economic impact (see Trump and Trade Update, October 16, 2018 and ITC Notice of Investigation). Eventually, the Congress will have to pass legislation to implement the USMCA, a final step in the implementation process which may have become more difficult with the Democratic Party assuming control of the House of Representatives in the next session of Congress in January 2019. While Trump expressed confidence today that the USMCA will pass Congress in the new year, bilateral opposition in both houses of Congress is mounting, which may lead to more side letters on certain issues or concessions on other unrelated legislation. The legislatures in Mexico and Canada must also ratify the trade agreement, but approval in both without much pushback is expected. Most trade analysts are predicting that the terms of the agreement may not truly be finalized and implemented until well into 2019.

]]>https://www.trumpandtrade.com/2018/11/united-states-mexico-canada-sign-new-trade-agreement/feed/0CBP Ruling Determines “Substantial Transformation” Requirements Trump NAFTA Marking Rules for Application of Section 301 Tariffs and Trade Remedy Dutieshttps://www.trumpandtrade.com/2018/11/cbp-ruling-determines-substantial-transformation-requirements-trump-nafta-marking-rules-application-section-301-tariffs-trade-remedy-duties/
https://www.trumpandtrade.com/2018/11/cbp-ruling-determines-substantial-transformation-requirements-trump-nafta-marking-rules-application-section-301-tariffs-trade-remedy-duties/#respondTue, 27 Nov 2018 15:23:31 +0000https://www.trumpandtrade.com/?p=2268Continue Reading]]>U.S. Customs and Border Protection (CBP) issued a significant ruling in September that distinguished between North American Free Trade Agreement (NAFTA) country-of-origin marking rules and the country-of-origin rules applying to products subject to Section 301 tariffs and trade remedy duties. In its ruling, CBP determined that Chinese-origin components imported into Mexico for assembly into an electric motor satisfied the requirements for marking the assembled product as a product of Mexico in accordance with the NAFTA Marking Rules; however, it ruled that the Chinese-origin components were not “substantially transformed” in Mexico and that the assembled final product remained a product of China subject to the U.S. government’s Section 301 retaliatory tariffs on imports of Chinese electric motors and to any potential trade remedy duty. CBP’s determination requires importers to understand thoroughly their supply chains, including the manufacturing processes of their suppliers and the origin of components used in those manufacturing processes.

]]>https://www.trumpandtrade.com/2018/11/cbp-ruling-determines-substantial-transformation-requirements-trump-nafta-marking-rules-application-section-301-tariffs-trade-remedy-duties/feed/0U.S. International Trade Commission Initiates Investigation to Assess Likely Impact of USMCAhttps://www.trumpandtrade.com/2018/10/u-s-international-trade-commission-initiates-investigation-assess-likely-impact-usmca/
https://www.trumpandtrade.com/2018/10/u-s-international-trade-commission-initiates-investigation-assess-likely-impact-usmca/#respondTue, 16 Oct 2018 14:41:06 +0000https://www.trumpandtrade.com/?p=2159Continue Reading]]>Following receipt of a request from the U.S. Trade Representative (USTR), the U.S. International Trade Commission (USITC) has initiated investigation No. TPA-105-003 for the purpose of preparing the report required by section 105(c) of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015. The report will assess the likely impact of the United States-Mexico-Canada Agreement (USMCA) on the U.S. economy as a whole and on selected industry sectors. Transmittal of the final USITC report to the president and Congress must occur no later than 105 days after the president enters into the agreement.

The investigation, United States-Mexico-Canada Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors, was requested by the USTR in a letter received on August 31, 2018. In assessing the likely impact of the USMCA on the U.S. economy, the report will include information and data on the impact the agreement will have on the gross domestic product, exports and imports, aggregate employment and employment opportunities, the production, employment and competitive position of industries likely to be significantly affected by the agreement, and the interests of U.S. consumers.

Key Dates:

October 29, 2018: Deadline for filing requests to appear at the public hearing

October 30, 2018: Deadline for filing prehearing briefs and statements

November 15-16, 2018: Public hearing at USITC

December 20, 2018: Deadline for written submissions from the public

Further information on the scope of the investigation and the procedures for written submissions are available in the USITC’s notice of investigation, dated October 12, 2018.

]]>https://www.trumpandtrade.com/2018/10/u-s-international-trade-commission-initiates-investigation-assess-likely-impact-usmca/feed/0NAFTA Becomes the United States-Mexico-Canada Agreement (USMCA)https://www.trumpandtrade.com/2018/10/nafta-becomes-united-states-mexico-canada-agreement-usmca/
https://www.trumpandtrade.com/2018/10/nafta-becomes-united-states-mexico-canada-agreement-usmca/#respondWed, 03 Oct 2018 01:07:20 +0000https://www.trumpandtrade.com/?p=2125Continue Reading]]>After successful, last-minute negotiations, Canada and the United States agreed on September 30, 2018 to revise and modernize the North American Free Trade Agreement (NAFTA). The United States and Mexico previously announced their intent to proceed with a revised trade agreement (see Trump and Trade Update dated September 4). In remarks to the press, President Trump said, “Throughout the campaign, I promised to renegotiate NAFTA, and today we have kept that promise,” adding, “Once approved by Congress, this new deal will be the most modern, up-to-date, and balanced trade agreement in the history of our country, with the most advanced protections for workers ever developed.”

To augment the president’s announcement, the Office of the U.S. Trade Representative (USTR) released a series of fact sheets concerning the renegotiated trade agreement with Mexico and Canada:

According to the USTR, these features are among the highlights of the new agreement:

U.S. auto manufacturers and workers will benefit from new rules of origin requiring 75 percent of auto content to be produced in North America, and the new agreement will incentivize billions of dollars in additional U.S. vehicle and auto parts production.

New trade rules will increase wages by requiring that 40-45 percent of auto content be performed by workers earning at least $16 per hour.

For textiles, the agreement will promote greater use of Made-in-the-USA fibers, yarns and fabrics. It also establishes provisions for textile-specific verification and customs cooperation that provide new tools for strengthening customs enforcement and preventing fraud and circumvention.

The new labor chapter is a core part of the agreement and will make the labor provisions fully enforceable.

Canada will eliminate its “Class 7” program that allows low-priced dairy ingredients to undersell U.S. dairy products, and will provide new access for U.S. products, including fluid milk, cream, butter, skim milk powder, cheese and other dairy products. Canada will also eliminate its tariffs on whey and margarine.

For poultry, Canada will provide new access for U.S. chicken and eggs and increase its access for turkey. Under this agreement, all other tariffs on agricultural products traded between the United States and Mexico will remain at zero.

The new agreement includes a modernized, high-standard chapter that provides strong protection and enforcement of intellectual property rights, including 10 years of data protection for biologic drugs and a large scope of products eligible for protection.

Strong measures on digital trade have been established, including rules to ensure data can be transferred cross-border and to minimize limits on where data can be stored.

An updated financial services chapter includes commitments to liberalize financial services markets and facilitate a level playing field for U.S. financial institutions, investors and investments in financial institutions, and cross-border trade in financial services.

The environment chapter includes enforceable environmental obligations, including obligations to combat trafficking in wildlife, timber and fish; strengthen law enforcement networks to stem such trafficking; and address pressing environmental issues such as air quality and marine litter.

]]>https://www.trumpandtrade.com/2018/10/nafta-becomes-united-states-mexico-canada-agreement-usmca/feed/0Trump Administration Moves Forward with Proposed Trade Agreement with Mexico, Continues Negotiations with Canadahttps://www.trumpandtrade.com/2018/09/trump-administration-moves-forward-proposed-trade-agreement-mexico-continues-negotiations-canada/
https://www.trumpandtrade.com/2018/09/trump-administration-moves-forward-proposed-trade-agreement-mexico-continues-negotiations-canada/#respondTue, 04 Sep 2018 18:20:50 +0000https://www.trumpandtrade.com/?p=2099Continue Reading]]>On August 31, 2018, President Donald Trump officially notified Congress of his administration’s intent “to enter into a trade agreement with Mexico — and with Canada if it is willing, in a timely manner, to meet the high standards for free, fair, and reciprocal trade contained therein.” Notification was necessary under the provisions of the Trade Promotion Authority (TPA) legislation, which allows “fast track” consideration of trade agreements (i.e., Congress can vote to approve or reject a trade deal but cannot amend the text of the agreement). In the wake of the president’s notification, U.S. Trade Representative Robert Lighthizer indicated that a resulting free trade agreement could either be bilateral (with Mexico) or trilateral (with Canada also), depending upon the final negotiated text of any agreement. It has been questioned, however, whether a bilateral agreement fulfills TPA requirements since Congress had been earlier notified of the Trump administration’s intent to renegotiate a trilateral North American Free Trade Agreement (NAFTA). If Congress believes that a free trade agreement with only Mexico does not qualify for TPA consideration, amendments could be offered by Congress, potentially complicating any final agreement. With Congressional notification under the TPA, the actual text of any agreement must be submitted to Congress within the next 30 days for its consideration.

Canada and the United States could not conclude a final agreement last week in their renewed negotiations to revise and update the NAFTA after Mexico and the United States announced their successful negotiations. Both countries, however, indicated that progress was made and that they will continue negotiations over the next 30 days. According to trade officials from both countries, the remaining key issues relate to Canada’s agricultural programs (particularly its dairy program) and the United States’ desire to eliminate NAFTA’s Chapter 19 dispute settlement system. Matters were complicated on Friday, August 31, when President Trump was quoted in the press that he would make no concessions to Canada and could instead impose tariffs on U.S. imports of Canadian automobiles. Canadian Foreign Minister Chrystia Freeland replied that “the focus is on getting a good deal, and once we have a good deal for Canada we’ll be done.” On Saturday, September 1, the president further heightened tensions by tweeting, “There is no political necessity to keep Canada in the new NAFTA deal. If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out.” He added a warning that “Congress should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be far better off … ”

]]>https://www.trumpandtrade.com/2018/09/trump-administration-moves-forward-proposed-trade-agreement-mexico-continues-negotiations-canada/feed/0United States and Mexico Agree in Principle to New Trade Agreementhttps://www.trumpandtrade.com/2018/08/united-states-mexico-agree-principle-new-trade-agreement/
https://www.trumpandtrade.com/2018/08/united-states-mexico-agree-principle-new-trade-agreement/#respondWed, 29 Aug 2018 18:46:55 +0000https://www.trumpandtrade.com/?p=2093Continue Reading]]>On August 27, 2018, the United States and Mexico reached a preliminary agreement “in principle, subject to finalization and implementation,” to update the North American Free Trade Agreement (NAFTA). The Office of the U.S. Trade Representative (USTR) stated that the updated agreement will “support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America.” In reaching the agreement with Mexico, President Trump stated that, “America has … finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs, and our Nation’s wealth.”

While full details of the agreement have not yet been released, a White House fact sheet states that the agreement modernizes and rebalances the trade relationship “to reflect the realities of the 21st century,” including:

New “rules of origin” requirements to incentivize vehicle and automobile parts production in the United States, supporting high-wage jobs.

Stronger and enforceable labor standards.

New commitments to reduce trade-distorting policies for agricultural goods.

While President Trump and USTR Robert Lighthizer have repeatedly indicated that the United States would insist upon a five-year “sunset clause” for any revised trade agreement, the preliminary agreement with Mexico includes a sunset clause for a 16-year period, with a review of the terms after six years to address any problems. At the six-year review juncture, the countries could negotiate on any issues or problems and/or agree to extend the trade agreement for another 16 years.

The announcement almost immediately became embroiled in controversy. President Trump stated that he would formally terminate the NAFTA since the United States had reached an agreement in principle with Mexico; however, Mexican President Enrique Peña Nieto responded that a new agreement ultimately must include Canada. In other remarks, President Trump indicated that Canada could either join the agreement between the United States and Mexico, or the United States could reach a separate agreement with Canada. Notably, Canada was not involved in these negotiations with the United States and Mexico, but Canadian Foreign Minister Chrystia Freeland indicated in the past that the country would rejoin discussions after the U.S.-Mexico bilateral issues were resolved; she rushed to Washington, D.C. this week for accelerated talks. Congress has been consistent in its position that it wishes to see a trilateral trade agreement (i.e., a revised and modernized NAFTA).

]]>https://www.trumpandtrade.com/2018/06/trump-administration-self-initiates-section-232-national-security-investigation-automobile-automotive-parts-imports/feed/0NAFTA Negotiations Continuehttps://www.trumpandtrade.com/2018/05/nafta-negotiations-continue/
https://www.trumpandtrade.com/2018/05/nafta-negotiations-continue/#respondMon, 07 May 2018 22:07:36 +0000http://trumpandtrade.lexblogplatformthree.com/?p=1874Continue Reading]]>Top trade officials from the United States, Canada and Mexico will resume negotiations over revisions to NAFTA this week in an effort to finalize an agreement. Reports indicate that while progress has been made, a number of issues remain, including rules of origin pertaining to automobiles, dispute settlement, government procurement and labor.

All parties agree that May will be a critical month in these renegotiations given upcoming events and important time lines. Mexico’s presidential election will occur in July 2018, and U.S. mid-term congressional elections will occur in November 2018. U.S. Trade Representative Robert Lighthizer has indicated a strong desire to conclude negotiations in May in order to seek approval from the current Congress under Trade Promotion Authority.